SME funding and finance

The Budget introduced several key measures to lighten the load for business in these blighted times but key questions about access to finance for small and medium-sized enterprises (SMEs) remained unanswered in George Osborne’s speech.

Expanding SMEs claim that access to credit remains tight as the banks impose more onerous terms and conditions.
But corporate bankers say demand for lending by SMEs has reduced because many such businesses are focusing on repaying debt in the downturn rather than taking on fresh or rearranged financial commitments.

This whole lending scenario is complicated further by the so-called ³wall of refinancing² facing business in the next 18-24 months, as a large number of lending facilities agreed between 2006 and 2009 are due for renewal.

So who does the owner of an SME turn to when seeking finance to grow?

Two key sources of finance are the North West Fund - a £185m pot providing debt and equity funding from £50,000 to £2m for SMEs based in or relocating to the North West of England ¬ and grant funding.
The NW Fund is managed by six firms of fund managers and they’re actively seeking opportunities to invest in SMEs.

Despite the demise of the NWDA, grant funding remains available through a wide range of funders, particularly for research and development from proof of concept to prototype and commercialisation.

Any business looking to access funding must prepare a strong business case on how their project meets the funders¹ criteria and why they should benefit from financial support.

The funding available is limited so SMEs should take specialist advice and act quickly if they want a share of the cake.

Les Bury
Partner, Beever and Struthers